The decision to become part of a franchise is rarely an easy one to make. The upfront investment and loss of one’s brand identity in exchange for another can be difficult for business owners to process.
But there are numerous benefits to joining a franchise, says Kurt Hurley, vice president of marketing for bluefrog Plumbing + Drain and Restoration 1 franchises.
“You enjoy the power of the brand, meaning you automatically have buying power, vendor relationships, professional marketing assets, designs for branded trucks and uniforms, brand influence and much more,” he says. “Also, the first day that you open your doors you enjoy brand recognition, which is a powerful tool to help jumpstart your new business.”
Franchisees can also benefit from “how much more they can do in sales, how much more money they can save on everyday purchases, how much more customer generation and retention they can do, how much more their businesses could be worth being part of a franchise, and how much more money they can put on their bottom line,” says Troy Latuff, vice president of franchise and business development for Clockwork, Inc.
Entering into a new business can be downright scary, but a good franchise utilizes the success of others, creates standards and processes, learns from past mistakes, and provides a path to building a thriving business, says Mike Pearce, chief development officer, ServiceMaster Franchise Services.
“Franchise businesses have proven to be far less risky than independent startups,” he adds.
Becoming a franchisee can also be a plus for employees, says Ellen Rohr, president of Zoom Drain Franchise Co. At Zoom, they take pride in cultivating talent.
“Zoom Drain is committed to creating careers, not just jobs,” she says. “We welcome willing and capable people, with no experience, and invest in them. … Our hub-and-spoke growth model is inspired by the awesome people who work with us and designed so we can grow together.”
James Walker, COO of bluefrog Plumbing + Drain, likens investing in a franchise to “getting a blueprint for business success.”
“This isn’t only true for the franchise owner, but also for how to staff appropriately across sales, management, office support and licensed plumbers in the field,” he says. “Employees of a franchise location enjoy both the grassroots advantages of a local owner/operator and the national power of an ever-expanding network.”
The when and why
Franchising doesn’t necessarily make sense for some contractors, but for others, it can be a good way to expend into a new field, grow quickly, and shorten the learning curve in order to capitalize on an existing business empire, Rohr says.
“At Zoom Drain, we call this a ‘plus play’ franchise — adding a new vertical to your contracting company.”
A contractor should consider franchising when their business has reached a point in which they are poised for growth and looking to add services to diversify their income earning capacity, Pearce says.
“Franchising offers a lower-risk way to grow by providing a well-known brand, long-proven processes, training, and access to national customers,” he says.
Walker says franchising is a great avenue for contractors to expand through a proven business model, but timing is different for everyone.
“Whether you’re new to the industry or a professional with 20-plus years of experience, I can tell you that I’ve witnessed individuals from all walks of life be very successful with a franchise business,” he says.
Finding the right franchise is an intensely personal journey — one that requires a significant amount of research.
“You must find a brand with leadership you trust to make good decisions with a track record of success,” Pearce says. “You have to feel good about wearing the brand logo on your chest with pride.”
Rohr advises contractors to do their homework.
“Visit their model center and get clear on what your training will be and what is available for your team members,” Rohr says. “Talk to team members and ‘look under the hood.’ … Be sure to visit with existing franchisees, too. Find out who you’ll be working with — character is paramount.”
Walker agrees it’s “important to do your research” when making such a significant investment.
“Look into every aspect of the business and ask plenty of questions. It’s important to remember that franchising is not for everyone, and different brands are better suited for different people. … Spending time researching and talking to those who have made the leap into franchising is an important step.”
Like Pearce, Rohr and Walker, Latuff advises taking time to explore the programs available.
“Talk to people — not just the sales teams,” he says. “Ask to speak with franchisees in the system. If you like what you hear, schedule a deep dive.”
Things to remember
Before starting the journey to becoming a franchise operator, contractors should keep a few things in mind.
“People often ask me, ‘If I’m an independent contractor why should I join one of your brands?’ That takes me back to the days when my business partner John and I had a successful residential HVAC company in Hastings, Minnesota, which was around for over 70 years,” Latuff says. “What started us thinking about taking our independently owned business to a national brand was looking beyond where we were to where we wanted to be. We charged ourselves with being open to change, and we learned everything we could about the franchise system — and the people behind it — before we made our decision.”
Pearce says it’s important for contractors to fully understand their current financial situation, which means having all current financial information available.
“Ensure that you are not over-leveraged. Proper capitalization will go far in ensuring future outcomes of a new franchise business,” he says. “Make sure you understand the process of due diligence in learning the finer details of any business process. A highly skilled franchise development professional can help you through the process to ensure you do not miss an important step.”
Walker says it’s important contractors know that investing in a system means having to follow that system.
“A franchise isn’t a place for you to take creative liberties or operate as you see fit,” he explains. “In more exact terms, entrepreneurs might make good franchise founders, but they don’t make good franchisees.”
It’s all about the big picture, Rohr says. That means evaluating not only business goals but also personal goals.
“Measure the costs — your time, energy and money — and whether the rewards are commensurate with the expense. Then, do your due diligence. Explore the systems, and get to know the people. Look for solid systems that will help you grow fast and profitably.”
Franchising isn’t a “magic bullet,” Rohr adds, and the decision is not to be taken lightly.
“Once you join up, jump in. Embrace the systems and the community and enjoy, as [PM columnist and Zoom Drain co-owner] Al Levi says, ‘less stress and more success.’”